Recently, the United Nations Conference on Trade and Development (UNCTAD) conducted a trade analysis of the effects and consequences of COVID19, a global health pandemic, on developing countries, and published a Trade Report dated 30-03-2020 (Trade Report) thereof. In the said Trade Report, the UNCTAD made the following observations:
1- That, in the recent times, the developing economies have been largely affected by increased capital outflows, foreign currency depreciations, loss of export earnings, declining tourist revenues, reduced economic growth and other adverse effects in sectors such as manufacturing, trade, foreign direct investment, etc.
2- That the entire world economy would be going into a recession this year, which is likely to cause a loss of trillions of dollars of global income. The UNCTAD further indicated that as a result of the global recession, there would adverse effects on major developing countries, except China and India, which are expected to survive the recession.
3- That the developing countries may lack the monetary and administrative capacity in the coming times, to respond to this crisis. This may adversely affect their progress towards sustainable development.
Thus, in view of the unprecedented economic damage, being faced by the developing countries (excluding China), due to global COVID19 crisis, the United Nations (UN) has proposed to create a COVID-19 Rescue Package of a total amount of USD 2.5 Trillion in the following manner:
a) To cancel USD 1 Trillion of the debts owed by developing nations, this year.
b) To allocate USD 1 Trillion for countries that are in dire need of money in this COVID-19crisis.
c) To grant USD 500 Billion to emergency health services and related social relief programmes.
Therefore, according to various experts, although the Trade Report does not explain as to why and how China and India would survive the recession, but it clearly states that the UN would be taking effective actions to boost the resilience of emerging economies to fight the future hardship.
The Report must be based on in depth study by renowned economists. It brings hope for India as the Report clearly states that India may escape global recession. We can only keep our fingers crossed and hope it comes true in the times to come.
Senior Legal Associate
The Indian Lawyer
Sushila Ram Varma
The Indian Lawyer